UAE MARKET REVIEW AND FORECAST 2021 - Research - Knight Frank
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Research UAE MARKET REVIEW AND FORECAST 2021
UAE MARKET REVIEW AND FORECAST 2021
33.0%, which sits below historic averages. This in softer level of demand was largely underpinned putting further pressure on prices.
part has underpinned moderation in sales price by a significant drop-off in off-plan sales, which
Whilst Dubai’s prime residential market saw
and rental rate declines and even in some cases fell by 32.1% in 2020. Secondary market sales
prices decrease by 4.2% in the year to December
increases. on the other hand increased by 7.2% over the
2020, we are beginning to see signs of a recovery
same period and for the first time in five years
in price performance in some prime sub-markets.
accounted for the largest share of activity in the
For example in the six months to December 2020,
market.
Dubai residential market apartment and villa prices on the Palm Jumeirah
Average mainstream prices in Dubai fell by 7.1% increased by 5.1% and 9.4% respectively. Over
review in the 12 months to December 2020. Price falls the same period, villa prices in District One
Despite Dubai seeing some of the most stringent were largely concentrated in the apartments have increased by 3.5%. Other prime markets
lockdown measures in the UAE throughout the segment of the market, where prices fell by such as Downtown Dubai and Emirates Hills are
early stages of the pandemic, residential demand 8.0%, whereas villa prices were relatively stable. also showing similar signs of improvement in
was relatively resilient in 2020. Initial data shows Average prices for new-build apartments fell market performance. More so, in contrast to the
that almost 33,000 residential units transacted on average by 4.0% in the year to December mainstream market, prime transaction volumes
in 2020, down 16.4% compared to 2019. This 2020, with softer demand for off-plan properties increased by 7.9% in 2020 compared to 2019.
Abu Dhabi, Mainstream Price Abu Dhabi, Mainstream Rental Abu Dhabi, Residential Mainstream
Performance, Year-on-Year % Change Performance, Year-on-Year % Change Gross Yields
to December 2020 to December 2020
Macroeconomic overview Looking ahead, the UAE’s GDP is forecast to average by 2.0% in 2020, down from 7.5% a year
All Properties Apartments Villas All Properties Apartments Villas All Properties Apartments Villas
expand by 1.1% in 2021 and by 4.0% in 2022, earlier. Whilst over this period we have seen
The adage of “there are decades where nothing according to data from Oxford Economics. average apartment prices fall by 3.0%, average
happens; and there are weeks where decades During this period, GDP growth rates between prices for villas have increased by 2.0%, the first 3.0% 0.0%
happen” certainly applies to the weeks of March Abu Dhabi and Dubai are initially expected annual increase in prices since 2014. 0.5%
2020. As the COVID-19 pandemic raged, we saw 2.0% 2.0%
to fragment, where Abu Dhabi and Dubai are -1.0%
Residential rents in Abu Dhabi continued to
social mobility norms curtailed in a manner expected to record growth rates of 1.6% and 5.4% 1.0% -1.5%
Dec-19 6.7% 7.0% 5.8%
soften in 2020, with average rents decreasing by
never experienced before. Almost uniformly, the in 2021, before converging to 5.3% and 5.0% in
4.3%. Over this period, average apartment and 0.0%
-2.0%
world came to a standstill, with flights grounded, 2022 respectively.
villa rents fell by 4.6% and 2.6% respectively. -2.5%
-2.6%
businesses shuttered and curfews enacted in -1.0%
-3.0%
large swathes across the world. As at December 2020, gross yields in Abu Dhabi’s Dec-20 6.5% 6.9% 5.5%
-2.0% -2.0% -3.5%
Such a seismic shock would also go on to have Abu Dhabi residential mainstream market registered on average at
-4.0%
-4.3%
6.5%, down from 6.7% a year earlier. -3.0% -3.0%
major impacts on global economic activity,
market review -4.5%
-4.6%
where it is estimated that global GDP decreased A total of 2,815 units were delivered in Abu Dhabi -4.0% -5.0%
by 3.5% in 2020. In the UAE, initial estimates Residential sales prices in Abu Dhabi fell on in 2020, an estimated materialisation rate of Source: Knight Frank Research, REIDIN Source: Knight Frank Research, REIDIN Source: Knight Frank Research, REIDIN
show that GDP is expected to contract by 7.7%
in 2020; a trend underpinned by the fact its core
economic sectors, the hydrocarbon, tourism and
retail sectors, are arguably amongst the most
affected by the pandemic. However, despite this
Dubai, Mainstream Price Performance, Dubai, Mainstream Rental Dubai, Residential Mainstream
shock, the UAE’s commendable handling of the
Year-on-Year % Change to December Performance, Year-on-Year % Change Gross Yields
pandemic and fiscal and monetary stimulus UAE GDP, Year-on-Year Change
2020 to December 2020
plans have seen recovery ensue in these and All Properties Apartments Villas New Build All Properties Apartments Villas All Properties Apartments Villas
8.0%
other sectors. Apartments
6.0%
The UAE’s Purchasing Managers’ Index (PMI),
4.0% 0.0% 0.0%
which tracks the country’s private non-oil
-0.4%
economy, shows that business activity has 2.0%
-1.0%
-2.0%
stabilised in Q3 and Q4 2020, where the index -2.0%
0.0% -4.0% Dec-19 6.4% 6.7% 5.4%
registered average readings of 50.4 and 50.1 -4.4%
-3.0%
respectively. However, the PMI’s employment -2.0% -6.0%
-4.0% -4.0%
index fell for the 12th month in a row, where
-4.0% -5.0% -8.0%
in 2020 employment in the UAE is expected to
Dec-20 6.1% 6.3% 5.2%
decrease by 8.5%. Job cuts are expected to be -6.0% -6.0%
-10.0%
largely focused in the transport, industry and -7.0% -7.1%
-8.0% -12.0%
consumer services sectors, whereas the financial -12.2%
1/1/15 1/1/16 1/1/17 1/1/18 1/1/19 1/1/20 1/1/21 1/1/22 -8.0% -8.0%
-13.3%
and business services sector is expected to see a -10.0% -14.0%
UAE GDP Abu Dhabi Dubai -9.0%
relatively immaterial rate of decline. Source: Knight Frank Research, REIDIN Source: Knight Frank Research, REIDIN Source: Knight Frank Research, REIDIN
Source: Knight Frank Research, Macrobond and the Central Bank of the UAE
Please refer to the important notice at the
end of this report.
UAE MARKET REVIEW AND FORECAST 2021 UAE MARKET REVIEW AND FORECAST 2021
Due to the continuing influx of supply – where outperformance to the latter.
Abu Dhabi office market uncertainty, unsurprisingly, we have seen
in 2020, 35,808 units were delivered – and limited levels of activity from new market
existing vacancy in the market, average rents in
In rental markets, even with employment levels
review entrants in Dubai’s corporate occupier market. Abu Dhabi Average Office Rents (AED/ sq m/ p.a.)
expected to pick up in 2021, we expect that rental
Dubai have fallen by 12.2% in 2020, up from the In Abu Dhabi’s occupier market, we continue to Where we are seeing new market entrants
rates will continue to decline at material rates. 2,500
8.1% decline registered a year earlier. As is the see occupiers take flight to quality, as they look or existing occupiers seeking additional
In Dubai, due to influx of supply and existing
case in the sales market, market performance is to take advantage of softer market conditions, office space, it is largely driven by project led
vacancy, which has increased by 1.8 percentage 2,000
fragmented, where in the year to December 2020, although in the Prime market, landlords are demand. The vast majority of demand in the
points over the course of 2020 to 18.3%, the
apartment rents fell by 13.3% whereas villa rents resolute on rental rates. market continues to stem from existing market
rate of decline is only expected to moderate
AED/SQM/P.A.
1,500
softened by 4.4%. participants looking to consolidate operations or
marginally. In Abu Dhabi, challenging economic Demand remains relatively subdued and geared improve the quality of their space. In response to
conditions are likely to keep the current rate of towards the 100 square metres segment, with 1,000
this, landlords, in an attempt to retain tenants,
decline persistent throughout 2021. fitted out space requirements being favoured. are offering competitive rent-free periods. More
UAE residential market Taking a longer-term view on the market, we Large shell and core requirements remain often than not, many occupiers are exercising
500
relatively rare, particularly those originating
outlook expect new supply levels to begin to ease from such options, particularly as many are reluctant
0
2022 in Abu Dhabi and from late 2023 in Dubai. from the private sector. As a result, the market to undertake capital-intensive office fit-outs
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Whilst there are a broad range of measures in In Abu Dhabi and Dubai, new launches in 2020 remains tenant-favoured. at this time and such contributions from
place designed to entice demand for residential were at the lowest levels since 2004 and 2012 In the year to Q4 2020, Prime rents in Abu Dhabi landlords are still only reserved for larger space Grade A office rents Prime office rents Citywide office rents Source: Knight Frank Research
property, aimed at both residents and respectively. In Abu Dhabi, the number of have increased by 2.3% to an average of AED requirements.
international investors, the UAE’s residential residential launches are expected to increase 1,660 (sqm/p.a.). Over the same period, Grade A As at Q4 2020, average Prime rents in Dubai
market continues to face a range of challenges over the coming year and given the relatively rents fell by 3.8% to AED 1,203 (sqm/p.a.). and registered at AED 209 (sq.ft./p.a.), down 3.0%
going forward. These challenges stem from both restrained levels of completions over recent Citywide rents by 3.0% to AED 939,(sqm/p.a.). compared to the same period a year earlier.
excess levels of supply and now weaker demand years, we expect this not to have a drastic Abu Dubai Office Supply
levels. The average vacancy rate in Abu Dhabi as at Q4 Grade A office rental rates have seen rates of
impact on the market. In Dubai, the number 4,500,000
2020, registered at 21.9%. Vacancy rates in Prime declines moderate on average in the 12-months
In 2021, both Abu Dhabi and Dubai’s residential of residential launches are expected to remain
and Grade A stock have decreased and remained to Q4 2020, where rents fell by 4.0%, registering 4,000,000
market are expected to record historic levels materially below the average seen over recent
stable respectively, whereas Citywide stock has at an average rate of AED 129 (sq.ft./p.a.).
Estimated supply, miilion sq m of GLA
of new supply of circa 14,000 and 83,000 units years. 3,500,000
seen vacancy rates increase by 3.7 percentage Citywide rents declined by 6.9% over the same
respectively. Even, as expected, this scheduled Assuming these trends remain constant, 3,000,000
points. period to an average of AED 99 (sq.ft./p.a.).
supply only materialises to historic precedents, mortgage rates remain at or around historic 2,500,000
we are likely to see sales prices continue to Vacancy in Dubai’s office market is estimated to
lows and loan-to-value ratios are kept at current
decrease at a similar rate to 2020. In Dubai, we have increased by 5.5 percentage points in 2020 2,000,000
levels, we are likely to see prices begin to bottom
to 24.3%. Whilst Prime and Grade A vacancy
expect market performance to fragment across out during 2022. In prime markets with limited Dubai office market review rates have edged higher over the last year,
1,500,000
prime and non-prime neighbourhoods, whereby levels of new supply, we are likely to see prices
the former segment is expected to show relative Given current economic conditions and market Citywide stock has seen the most significant 1,000,000
being to recover six-months prior to this.
increase in vacancy rates.
500,000
0
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Dubai, Residential Transaction
UAE office market outlook Existing office supply Forecast office supply Source: Knight Frank Research
There has been many discussions about the
5000 future of office spaces and their requirements
4500 going forward. There is no doubt that the will be particularly relevant and are already From a supply perspective during 2020, in Abu
4000
pandemic will change working patterns and as being played out. First, as with many markets Dhabi, an estimated 59,000 square metres of
3500
a result, the form and function of office space around the world, the UAE has a great quantity office space is set was delivered. Over the next
3000
will also need to change, however, we believe of low quality space. We believe this is the first two years we expect a further 356,000 square
2500
2000 the office will remain central to our working segment of space that will be shed, as occupiers metres of space to be added, bringing the total
1500 lives. Going forward, the office will be more take advantage of softer market conditions and GLA to 4.10 million square metres by 2023. As a
1000 than just a work setting but rather a place for take flight to quality. large portion of these additions continue to be in
500
socialisation, for collaboration, for innovation non-core locations or are for owner-occupation,
0 More so, going forward we will see demand for
and, increasingly, for education. This topic is we expect that they will not have a material
40 both conventional office space but also for space
discussed in Knight Frank’s 12 dynamics of the impact on market performance going forward.
30 as a service, where occupiers can have the option
post-Covid19- workplace report, which outlines
20 to take additional space, likely provided by an In Dubai, as at 2020, an estimated 241,000
the 12 dynamics of the post-COVID-19 workplace
10 operator which specialises in such services. square metres of GLA was delivered, bringing the
on a corporate, market and building level. More
% 0 Not only will this be required due to economic total GLA to 10.2 million square metres. The vast
so, we note that in most cases, the pandemic has
-10 uncertainties which will persist over the coming majority of this new supply is classed as Grade
fast-tracked changes in working patterns and
-20 years, but also due to the nature if project driven A and as a result, we are likely to see further
office space requirements that we were currently
-30 work in the region. This demand for quality pressure be exerted on rents in this segment
seeing. Therefore, the pandemic is not the root
-40 conventional and serviced office space going of the market. This trend is likely to be further
2018 2019 2020 cause of the change but an accelerator of it.
forward, with access to a range of amenities and exacerbated in 2021 where all of the circa 75,000
Total Ready Off-Plan Ready, YTD Year-On-Year % Change Off-Plan, YTD Year-On-Year % Change Total, YTD Year-On-Year % Change For market occupiers in the UAE, some of the service, is expected to create new benchmarks, square metres of space is classified as Grade A
Source: Knight Frank Research trends highlighted in the aforementioned report both in terms of office product and pricing. space.
UAE MARKET REVIEW AND FORECAST 2021 UAE MARKET REVIEW AND FORECAST 2021
UAE retail market review
Prior to the onset of the pandemic, the UAE’s Abu Dhabi Retail Activity
Dubai Office Supply
retail sector was already under considerable
10
pressure. This slowdown in demand was 12,000,000
underpinned by sluggish economic growth, a Data from Google’s Mobility 0
substantial increase in supply of regional and 10,000,000 Index shows that, post -2.00%
neighbourhood retail and a growing and a price
lockdown to the end of 2020,
Estimated supply, miilion sq m of GLA
-10
competitive e-commerce sector. 8,000,000
the total visitor numbers -20
Percent
-17.86%
Therefore, the onset of the pandemic, which
6,000,000
to Abu Dhabi and Dubai’s
prohibited non-essential stores from operating
retail and recreational -30
without restrictions for months, has pushed
4,000,000 establishments on average sat
many retailers to the brink and beyond. As at -40
2020, in the UAE, annual resident based retail
at 31.0% and 36.2% below their
spending is forecast to have declined by AED8.2
2,000,000
pre-pandemic baselines -50
billion. Around 47% of this decline is expected
0 -60
Novemver
December
October
March
August
September
to be attributable to Dubai, where resident based
April
June
July
May
2000
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2020
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2023
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2025
retail spending is expected to decrease by 4.7%.
2020 2021
Existing office supply Forecast office supply Source: Knight Frank Research
In Abu Dhabi, resident based retail spend is Retail & Recreation Grocery & Pharmacy Source: Knight Frank, Macroboard
expected to decline by AED2.3 billion, equating
to a decline of around 4.0%.
of development of multi-channel operators in
However, whilst resident based spending is the UAE, which will in turn boost physical retail.
important to the market, for certain markets, Dubai Average Office Rents (AED/ sq ft/ p.a.) Pure-play online retailers and multi-channel Dubai Retail Activity
particularly Dubai, tourism spending accounts retailers will not wholly displace physical retail. 10
Restriction Eased
for a significant portion of total demand. As a 300 Instead, at maturity where physical retailers take
0
result, it is not surprising that we continue to advantage of the technologies on offer, the lines 3.14%
250
see footfall levels sit considerably below pre- that differentiate the two are likely to converge. -10
pandemic baselines. Data from Google’s Mobility More so, if turnover rents become the norm, from
200 -20
Index shows that, post lockdown to the end of a landlords perspective this may provide access -18.43%
AED/SQM/P.A.
2020, the total visitor numbers to Abu Dhabi and
Percent
150 to additional revenue lines which may help -30
Dubai’s retail and recreational establishments on bolster returns. -40
average sat at 31.0% and 36.2% below their pre- 100
That being said, with margins shrinking and
pandemic baselines. -50
50 competition increasing we are likely to see
-70
Given this continued lack of footfall, many further pressure exerted on rents. Additional
0
landlords have transitioned, at least for the short competition in the market is not only stemming -60
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run, to turnover rent models. Large landlords from e-commerce but also from additional
-80
have also enacted tiered rent relief policies.
December
Novemver
physical retail. In 2020, Abu Dhabi has seen
October
March
August
September
April
June
July
May
Listed retail landlords provide the clearest Prime office rents Grade A office rents Citywide office rents Source: Knight Frank Research 87,000 square metres of GLA being added, taking
picture of the scale of the challenge faced by the total GLA to 1.99m square metres. By 2024, 2020 2021
Retail & Recreation Grocery & Pharmacy Source: Knight Frank, Macroboard
the sector. Emaar Malls has seen its base rent we expect this to increase to 2.70m square metres
revenues decrease by 60% y-o-y in the year-to- of GLA.
date to September 2020, whilst its turnover rent Definitions (With guidance from the Best
Practice Standards for Office Developments During 2020, Dubai has seen 202,000 square
revenues have increased by 437% over the same
(2015 V2.0) by the Middle East Council for metres of GLA added, bringing its total GLA to
period. Laudably, occupancy for Emaar Malls
3.86m square metres. By 2024, Knight Frank Abu Dhabi Existing Retail Supply, Dubai Existing Retail Supply,
over this period fell by only one percentage Offices (MECO):
By Type By Type
expects Dubai’s total GLA to increase to 4.77m
point. Prime: The Prime segment represents the
square metres. 0.4% 2.0% 6.4% 2.3%
average rent of the top 5% of all lettings in 0.5% 1.6%
3.0%
the market This additional supply is likely to continue
localising demand at the expense of non-prime
UAE retail market outlook Grade A: This segment of the market
assets that have a limited number of demand
represents offices which are adjacent to the
Looking ahead, reduced footfall levels and the drivers. Whilst historically these secondary
city centre, with rents on average higher Total Supply: 1.99 million sqm
fast-tracked adoption of e-commerce over the assets have been able to somewhat protect Total Supply: 3.86 million sqm
than those in the citywide market
last year will continue to provide considerable income by undertaking relatively low cost
headwinds to the UAE’s retail sector. However, Citywide: This segment represents the repurposing projects, such as utilising vacant
95.5% 88.3%
this is not to say that the sector is to be written broader city offices market, outside the units as offices and co-working hubs, the surge
off. Physical retail destinations, particularly ‘core city’, where usually a significant of in prime assets offering such services may crowd Mall Strip Mall
Special
Mall Special purpose
purpose
those supported by demand drivers, will office buildings are grouped these secondary assets out of the market.
continue to attract both retailers and footfall. Souk Type Community Mall Open Air Centre Community Mall
The pandemic may in fact accelerate the pace
Source: Knight Frank Research Source: Knight Frank ResearchUAE MARKET REVIEW AND FORECAST 2021 UAE MARKET REVIEW AND FORECAST 2021
UAE hospitality market investment horizons, where investment decisions headline rents in Abu Dhabi and Dubai fell by
are more closely correlated with the longer term 9.4% and 17.6% in the year to Q4 2020.
review outlook, investment in the sector will remain
UAE Key Performance Indicators, 2020 vs 2019
The COVID-19 pandemic has presented the global steadfast.
hospitality market with an unprecedented set OCC ADR RevPAR Room Rev Room Avail Room Sold
UAE industrial market
of challenges. The sector was not only the first
to be affected but to date has undoubtedly been United Arab Emirates -29.3% -16.5% -41.0% -43.1% -3.6% -31.8% outlook
the hardest hit. In addition to this, it is also most
UAE industrial market Looking ahead, we expect that average rents
Abu Dhabi
review
-16.8% -24.2% -37.0% -37.3% -0.5% -17.2%
likely to see long-lasting changes which have been are likely to soften further over the coming six
bought about purely by the pandemic. Dubai -34.5% -15.4% -44.6% -46.7% -3.8% -37.0% months before we see a floor in rental rates.
The UAE’s industrial market can largely be
First, we have seen activity in the global travel Ras Al Khaimah
singled out as one of the few sectors to benefit With the 100% foreign ownership legislation
-29.1% 13.2% -19.7% -27.1% -9.1% -35.6%
market decline dramatically. In 2020, the from the pandemic. now in effect, consolidation of space is likely to
total number of flights globally fell from its Sharjah -30.2% -11.9% -38.6% -42.0% -5.6% -34.2% continue. This will not only drive demand for
Demand has remained strong in both Free Zone
2019 average of almost 115,000 per day to lows larger sites, but is likely to contribute to rents
Fujairah -16.9% 10.1% -8.5% -14.1% -6.1% -22.0% and non-Free Zone locations throughout 2020.
of around 28,000 in the early stages of the softening. However, as discussed, the lack of
For the former, many firms operating primarily
pandemic. As lockdown restrictions around the Ajman -27.9% -0.9% -28.5% -30.8% -3.2% -30.2%
institutional grade stock is likely to limit the true
as exporters have seen strong growth in their
world eased and traveler confidence returned, extent of this demand coming to fruition.
businesses, largely due to supply bottlenecks
activity has partially recovered to an average Source: STR Global
in international supply chains and as a result
of almost 70,000 flights per day in 2020,
are looking to increase the quantum of space
representing a decline of 39.1% from a year earlier.
occupied. For the latter, demand has largely
Abu Dubai Average Industrial Rents, AED per sq.m. per annum
In turn, total international tourism arrivals stemmed from the requirement of last mile
have also decreased, with the World Tourism Global, Total Tracked Commercial Flights fulfilment centres, a trend underpinned by the 1000
Organisation estimating that in 2020, 130,000 increased utilisation of e-commerce platforms, a
900
international tourist arrivals were 74% lower 120,000
significant by-product of the pandemic.
800
than in 2019, with some 1.07 billion fewer tourists 110,000 International demand has been less forthcoming
travelling in 2020. 2019 Avg:
700
10,0000
114,912
over the course of the year. However, as travel
AED/Sq.ft.
600
The UAE has seen similar trends unfold, where 90,000 routes begins to reopen we are seeing early signs
Number of Flights
it all but grounded flights in March 2020 with 8,0000 of growth from this segment of the market. 500
activity resuming, in parts, in early July 2020. 70,000
Enquiries to date have mostly originated from
400
2019 Avg:
As a result, passenger traffic volumes at Dubai 69,988
firms looking to near-shore operations in global
60,000
300
International Airport, fell to 17 million in 2020, hubs. More so, in Abu Dhabi we have seen a
50,000
down from 86.4 million in the year before. strong surge in enquiries from firms looking to 200
4,0000
set-up vertical farming operations, on the back 100
Despite efforts to reopen, visitation remains 3,0000
of government led initiatives. As a result of the
materially below pre-pandemic norms. Using 20,000
0
pandemic, food security has been a key area
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Feb
Dubai as a proxy for demand shows that,
where the government is looking increasingly
visitation in the year-to-date to November 2020 Number of commercial flights 2019 Number of commercial flights 2020 Number of commercial flights 2021
to achieve self-sufficiency. In the short-run, to
Abu Dhabi Airport Free zone ICAD1 Mussafah Kizad Al Markaz
is estimated to total around 5.37m, down 64.2% Source: Knight Frank Research FlightRadar24 AB
achieve security, demand from government Source: Knight Frank Research
year-on-year. Therefore, it is unsurprising that
related entities for industrial units suitable
we have seen performance decline across almost
for foodstuffs storage has also seen a marked
every Key Performance Indicator. Year-on-Year
UAE hospitality market increase.
in the year to date December 2020, citywide
RevPARs in the UAE have fallen between 8.5% outlook Availability of institutional quality assets is still Dubai, Average Industrial Rents, AED per sq.ft. per annum
and 44.6%. There have been markets which have limited in the UAE which poses a significant
Looking ahead, despite the drive to inoculate
recorded relative outperformance, with demand challenge to the development of the market. 60
the global population we are still not expecting
to these markets largely stemming from diverted This is the case in Free Zone and non-Free Zone
tourism being able to return in a meaningful 50
demand from UAE residents, who are either locations alike, where many occupiers are looking
manner until the latter part of 2022. This is
unwilling or unable to holiday in their preferred to consolidate operations and increase the quality
despite the UAE’s commendable handling of the 40
destinations and instead are choosing to holiday of space they occupy. In non-Free Zone locations
pandemic, establishment of air-bridges and its
within the UAE. Such markets of note are Abu Passenger traffic volumes this trend is particularly acute in the standalone 30
AED/Sq.ft.
relatively agreeable weather for most parts of the
Dhabi, Ras Al-Khaimah, Fujairah and the beach warehouse segment of the market where vacancy
year. at Dubai International 20
property market segment in Dubai. rates now stand below 5%. More so, in these on-
The rescheduled Expo 2020 will help bolster
Airport, fell to 17 million shore locations, this demand largely stems from 10
On a broader UAE level, performance data since
demand, although visitation is unlikely to match in 2020, down from 86.4 changing consumption patterns where there are
the reopening of borders in July to December
the pre-pandemic expectations of 25 million million in the year before now a growing number of requirements from 0
2020, paints a significantly better picture. Over
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Q2 2017
Q3 2017
Q4 2017
Q1 2018
Q2 2018
Q3 2018
Q4 2018
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Q3 2020
Q4 2020
visitors. Despite challenging market conditions, multi-channel retailers looking to improve their
this period, we have seen the UAE’s Average Daily
asset owners understand that this is a short term last mile delivery networks.
Rate (ADR) increase by 68.4% and occupancy Al Quoz Al Quoz (Class 2) Dubai Industrial Park Dubai Maritime City Dubai South
shock, rather a long term structural change to the
rates increase by 29.7 percentage points, resulting With the market seeing high levels of non-
market. As a result, given the sector’s favourable DIP JAFZA Class 2 National Industries Park Jebel Ali Ind (Class 2) JAFZA
in Revenue per Available Room (RevPAR) institutional grade stock and institutional grade
long term outlook and investors’ extended Source: Knight Frank Research
increasing by 201%. market remaining tenant favourable, averageKEY CONTACTS
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